Technology  •  7 minute read

The Cloud Supply Chain: What It Is and How to Connect to It

STORD

Over the past decade, we’ve seen companies rapidly expand into omnichannel sales approaches as they respond to their customers’ increasingly higher expectations for multiple buying options and speedy delivery. To keep up with the resulting complexity to the supply chain, brands have been relying on third-party logistics partners and manually piecing together long contracts, RFPs and limited software capabilities with their own third-party integrators and multiple software tools. 

This assembly of off-the-shelf and custom logistics services and technology tools leaves the traditional supply chain extremely fragile and without the agility to keep up with demand or the visibility to make data-driven decisions in real time. Any ensuing interruptions or flaws in the supply chain may have a detrimental impact in a world where individuals and businesses depend on the continued flow of goods to function, so much so that modern logistics accounts for one eighth of the global economy.

Solution: The Cloud Supply Chain

The supply chain cloud is a digital 3PL with end-to-end logistics services vertically integrated through a singular software platform and offered in a pay-as-you-go model. When a company builds their own fragile logistics stack, they’re its only user, responsible for its growth, maintenance, and integrations. On a supply chain cloud, brands have access to a fully integrated vertical solution -- all the logistics services and technology tools needed for an end-to-end supply chain wrapped up in one pre-integrated cloud platform. 

Advantages of Cloud Computing over Traditional Infrastructure

Public cloud-computing is the on-demand delivery of IT resources via the Internet, pioneered by Amazon Web Services. Instead of every company building and managing their IT infrastructure from scratch, cloud computing offers computing power, storage and databases as they’re needed without the cost of owning and operating physical data centers and servers. Capital costs are replaced by variable costs, allowing for the possibility of scaling up and down as needed. 

Execution speeds are incredibly fast because expanding in the cloud doesn’t require lengthy planning and procurement periods. What you’re paying for are the space and resources in the cloud, but you’re still in complete control of the data it stores -- how it’s managed, how it’s encrypted, and how you want to export it. 

How Cloud Computing is Applied to Supply Chain

The cloud supply chain takes these cloud computing principles and applies them to the end-to-end supply chain. Warehousing and freight are as nimble as the cloud technology itself, as variable costs that are able to flex and scale on demand. 

Logistics partners are pre-connected to the cloud supply chain’s integrations hub, providing brands with a control tower view of operations and data necessary for real-time analysis of the entire supply chain. These connected warehouses and freight carriers provide the capacity necessary to execute on demand signals, significantly reducing the typical latency period between data science and procurement teams. Capacity is just as easily scaled down if demand signals indicate the supply chain is over-saturated.

Benefits of the Cloud Supply Chain 

In this model, the benefits of the cloud are extended to supply chain operations:

Scale up and down as needed 

Warehousing and freight services are operated on a pay-as-you-go model, enabling rapid response. In a typical supply chain, it takes months after identifying a demand signal to plan and procure additional, rendering optimization models obsolete. The cloud supply chain is a self-healing network, so in the event of sudden demand such as the COVID-19 pandemic, brands can quickly scale up to meet that demand in 24-48 hours, and just as quickly scale back down once the surge has passed. 

No capital expenses 

The supply chain cloud offers supply chain services and a cloud platform on a pay-as-you-go basis, giving brands of all sizes access to world-class logistics and software without the need to invest in physical infrastructure for warehousing or data centers.

Build to the cloud once and never again 

The supply chain cloud is pre-integrated with an expansive logistics network, so brands only have to integrate once to the cloud to be connected to the entire network. They no longer need to source one-to-one solutions for multiple integrations, significantly reducing launch times. 

Immediate access to a world-class logistics network 

Connecting to the cloud supply chain gives you access to Stord’s network of 500+ warehouses, 30+ fulfillment centers and 20,000+ carriers. Book a freight shipment, launch a new warehouse, or test a new distribution model all from the same cloud platform. 

Faster time to market 

A single integration into the cloud supply chain is all that’s needed to connect to an entire logistics network. New locations can be launched in days, instead of weeks or months, without the need to draw out timelines with integrations, RFPs and contract negotiations. 

Rely on a single software

Use one control tower for both your data and your supply chain operations to make decisions in real-time, without the latency period typical in traditional supply chain networks. 

Faster innovation speed

The data centralized and normalized in the cloud supply chain integrations hub allows for real-time modeling capabilities. Optimize costs, improve forecasting accuracy, and even enable a digital twin that runs scenarios and identifies the impact of events before they happen. 

Focus on your competitive advantage

With the cloud supply chain, brands can re-invest the time and resources previously spent on traditional expenses like IT, warehouse procurement, or data normalization into their market differentiation, and focus on expanding their product offerings or increasing customer stickiness.

Transitioning from a Traditional Supply Chain to the Cloud

Shifting your supply chain operations to the cloud has many benefits, but brands should be prepared to learn and adapt along the way. Stord offers easy ways to get started and test our software and network before expanding your operations. Experience some of the benefits of the cloud supply chain, such as controlling operations in the platform in real time, while only paying for what you’re currently using. 

Launch a warehouse

Many companies begin the transition to the cloud supply chain by launching with one warehouse on the network, either by moving product into a Stord warehouse, or integrating one of their existing 3PLs into the cloud supply chain.To launch with an elastic warehouse in Stord’s network, brands can share their network data with our experts and let us evaluate the best positioning of your inventory, or ask for a specific warehouse location in our network. After sharing operational details, number of units on hand, turns, SKUs, and a few other details, Stord will provide pricing and you can begin shipping immediately. 

Launch with our software

To launch with an integration to the cloud platform, companies will need to complete some upfront work to integrate an ERP, OMS, TMS, or any other relevant software systems. We recommend documenting SKUs, product details, SLAs, and order requirements for retail network positioning. Additionally, Stord will ask for brands’ preferences for procedures like inventory report frequency, order cancellation requests, overages, shortages and damages handling, and more. After the initial set-up, relevant information will be automatically shared with onboarded logistics partners through the integrations hub, shortening the typical ramp-up time. With the one-time integration completed, brands can quickly scale up their usage, adding new warehouse locations or freight lanes without investing in additional IT or procurement resources. 

Learn more about the Cloud Supply Chain logistics network and software in this downloadable guide: https://lp2.stord.com/free-cloud-supply-chain-guide

Original Publish Date: January 27, 2021